The Bank of England has effectively dropped its 2% inflation target, and is, instead, looking to minimize output volatility. Unfortunately, that's exactly what central banks did during the 1970s.

This transcript has been automatically generated and may not be 100% accurate.

... Bank of England abandoned its two percent inflation target ... yes in all but name ... although the bank's most current policy committee talks but returning inflation to two percent over the medium term ... the notion of medium term is becoming increasingly flexible ... indeed it's been years since inflation without love ... instead governor of the King is emphasizing ... the need to minimize the commies volatility ... sure the central bank can always choose its country's rate of inflation he admits ... but it's more important keep the economy growing of its stable pace than to get too wrapped up in the inflation rate itself ... it's worth remembering that this was exactly the same reasoning ... central banks to use during the nineteen seventies ... there were indeed some differences in the nature of developed economies than from now ... but central bankers reflexes of this and ... keep